Buying momentum to continue ahead - AXIS DIRECT

The benchmark indices opened the last week on a flat note and continued its downward momentum which hits a weekly low at 5663 level. However a sharp recovery throughout the week led index to close on a strong note above 5900 level. On week on week basis Nifty closed at 5945 with 226 points gains or 4%.

After five weeks consecutive down move Nifty witnessed a strong buying coupled with short covering around 200 day EMA support of 5650 which pulled index almost 290 points from the recent low of 5663 level. In previous week Nifty scaled up with higher High-Low formation which suggests bullish bias. Nifty on the weekly chart has formed a strong bull candle erasing its past three week's losses which indicates a fastest retracement of the recent downtrend. With Friday's close Nifty has given its six weeks down sloping Trend line breakout at 5870 levels on closing basis indicating shift of trend. However with current close Nifty has closed at 61.8% Fibonacci retracement resistance of 5945 of the current fall (6111-5663) which remains immediate hurdle. On the upside the immediate short term resistance zone around 5970-5990 level. A decisive close above this level would trigger a fresh upside rally in the range of 6030-6080 levels. On the downside immediate support is at 5880 and any violation of this would cause further downside. The short term trend has turned bullish as Nifty is placed above 20 DMA(5847) and 100 DMA(5847)which would support bullish bias. For the week short term traders are advised to book some profits near the above mentioned resistance zone as profit booking at higher levels cannot be ruled out. During the week Nifty is likely to trade in the range of 5990-5830 levels with mixed bias.

The daily strength indicator RSI and the momentum indicator – Stochastic are placed bullish which supports bullish bias in the near term. The weekly Stochastic has also given a positive crossover from oversold zone which suggests buying momentum to continue ahead. The trend deciding level for the day is 5930, If NIFTY trades above this level then we may witness a further rally up to 5970-6000-6040 levels. However, if NIFTY trades below 5930 levels then we may see some profit booking initiating in the market, which may correct up to 5900-5855-5830 levels.

Stocks to focus for intraday Long: Bajaj Auto, BPCL, Coal Ind., Gail, jindalstl,Lupin, M&M, ONGC, Pantaloon Ret

Stocks to focus for intraday Short: Ambuja Cem., OFSS, REC, Voltas

Source : Equity Bulls

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